Cape Town - Businesses addressing SA's economic challenges of slow growth, a shortage of capital formation and restrained public finances need a strong resolve to succeed, the SA Chamber of Commerce and Industry (Sacci) said on Thursday.
Sacci economist Richard Downing told Fin24 that for moribund growth levels to pick up, government policies must be very clear and not just "beating about the bush and talking in ways that no one understands".
"To obtain private sector investment to enhance economic growth and get out of the difficult situation the country is in, we need capital from foreign investors. It is, however, not enough just to just say that we need this. Government must also be clear what it means by this," said Downing.
Sacci released its September 2017 SACCI Business Confidence Index (BCI) on Thursday. The BCI does not reflect business sentiment, but rather how businesses are reacting to and experiencing prevailing business conditions.
The BCI had declined to its lowest level so far in 2017 in August to reach 89.6 points, but recovered by 3.4 points to 93.0 in September 2017.
This was marginally higher than its September 2016 level.
"Higher merchandise import and export volumes made notable contributions to the monthly improvement of the BCI in September 2017," the chamber said.
"Considerably higher merchandise exports volumes, lower inflation, a higher real value of building plans passed and improved new vehicle sales were the main contributors to the positive year-on-year impact on the BCI."
Concern
Sacci said it was concerned that real gross fixed capital formation declined in the second quarter of 2017, and that fixed investment by the private sector continued on a downward trend as investment in transport equipment and in residential and non-residential buildings diminished.
Downing told Fin24 that business confidence in SA was still at a low level - although it was slighlty better than in August.
The year-on-year comparison of the index was mixed. While it was better regarding financial policy and inflationary policy, it was yet not at a level which was attractive to lure investments to the country, said Downing.
"The worry is that fixed investment in SA is not enough. This kind of investment is important to create a sustainable and solid situation in the country. It is also very important that the public sector to do well and be efficient," he said.
"An all-inclusive type of approach is possible, but difficult - especially since the situation was allowed to deteriorate to such an extent. At the same time it is good that the SA Reserve Bank (SARB) is sticking to its guns."
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